- As per the U.S Energy Information Agency (EIA), the global energy consumption will witness a significant hike of 28% by 2040. Pollution caused by the usage of fossil fuels, is signaling a failure to efficiently provide the energy demand globally and such circumstances, coupled with increasing awareness on decreasing carbon footprints, is all set to capitalize the demand for biofuel.
- Biofuels are the energy source which is made up of living microorganism, starch, and other livestock. Biofuels are also made from oil or tree seeds such as rapeseed, sunflower, soya, palm, coconut or jatropha. Biofuels account for two major types: bioethanol and biodiesel. It has found tremendous scope of application in transportation and energy sector.
- As per the research report of AGR, it is estimated that the global biofuels market grew at CAGR of 4.75% in last 5 years and is likely to grow at a CAGR of 6% for the next 10 years by 2030 in value terms.
Biofuel Market Outlook:
- All the major sectors employing conventional fuel automatically stands out as potential markets to capitalize upon by the biofuel industry. Global biofuel production was ~98 Mn Tons in 2019 and demand is expected to grow@ CAGR 8 % during 2020-2030, driven mainly by Transport sector.
As per EIA, Transportation sector is the major consumer of biofuel. The Transportation sector has to comply with Advanced Energy Initiative (AEI) and Renewable Energy Directive (RED) rules to overcome petroleum dependence and curb carbon footprints
Biofuel Market Growth Drivers and Trends:
Most primary factors driving the global biofuels market are;
- Growing interest in alternative fuels on account of uncertainty in global fuel prices
- Energy security and
- Continuous rises in emission levels
Favorable government initiatives by developed countries such as Brazil, United States and more, are also fueling the growth of the global biofuels market. Biofuel is the only solution moderating energy security, environmental safety, and economic issues accompanying with petroleum products dependency.
Due to multiple factors such as oil price volatility, the necessity for concern over greenhouse gas discharges from fossil fuels, and funding from government by means of subsidies; etc., biofuels have garnered public and scientific attention in the last decade and shall continue in future also.
Challenges disrupting the market:
Biofuels have a lesser calorific value compared to conventional resources and refining the same for more efficient energy outputs is an expensive process. To shape up the obligatory manufacturing models to upsurge biofuel quantities, high investments are frequently required.
Though the global biofuel & biodiesel market has numerous growth drivers, market growth is curtailed by certain challenges;
- Several factors that are delaying the market growth are; Volatility in oil prices, barriers in retailing & distribution, development of biofuels, stringent rules and regulations & rise in competition among key players
- Another major challenge in the market is the higher production cost of biofuels as compared to conventional fuels
However, the point remains that biofuels are a consistent alternative energy resource. With more investments and considerations going into R&D, overcoming the disadvantages of biofuels and shaping them as suitable for extensive consumer use meets possibility. With the availability of technology, disadvantages will be decreased and the biofuel market eventually will grow due to demand.
Biofuel Market Players Perspective:
Some of the key players operating in the biofuel market profiled in this Avalon Global Research report are Abengoa Bioenergy S.A., Algenol , BTG International Ltd, Cargil; DuPont Industrial Biosciences, Granbio, POET-DSM Advanced Biofuels and Renewable Energy Group.
Although the market has fewer or no innovations, the players in the market are actively involved to ply their hands-on others production processes and product portfolios.
To do so, they are participating with each other in various ways, like acquisition, mergers, and tie-ups
- For e.g. In 2016, Clariant partnered with Scania, a heavy vehicle manufacturer, to produce 2G ethanol which reduces carbon emissions
- Also, in 2016 Renewable Energy Group, a leading supplier of biofuels, completed the acquisition of Sanimax Biodiesel Plant
- In 2018, Cargill got an approval for more than $38 million in industrial revenue bonds that has been approved for its expansion of biodiesel plants in Wichita, Kansas. The biodiesel plant is worth $87 million project at Cargill’s facility. The expansion will help the region to grow in the biofuel market.
Biofuel Market Research Scope:
- The base year of the study is 2019, with forecast done up to 2030. The study presents a thorough analysis of the competitive landscape, considering the market shares of the leading companies. These provide the key market participants with the necessary business intelligence and help them understand the future of the biofuel market.
- The assessment includes the forecast, an overview of the competitive structure, market trends, market demands, market drivers, market challenges, and product analysis. The market drivers and restraints have been evaluated to gauge their impact over the forecast period.
- The report further identifies the key opportunities for growth while also detailing the key challenges and possible threats. The key areas of focus include opportunity areas for biofuel market.